McDonald's August same-store sales fall across regions

Sept 9 (Reuters) - McDonald's Corp on Tuesday
reported declining sales at established restaurants across all
regions in August, the fifth monthly drop since CEO Don Thompson
took the helm in July 2012, and warned a China supplier scandal
would cut into profits.

The company, which has been battling internal missteps,
competition and shifting consumer tastes, said the supplier
issue that crushed sales in China and Japan would reduce
third-quarter profit by 15 to 20 cents per share.

Expectations were low ahead of the monthly report and shares
in McDonald's barely budged on the news, falling 0.7 percent to
$91.83 in early trading.

Thompson is under mounting pressure to improve results at
the world's biggest fast-food chain by revenue.

Among other things, analysts blame bloated menus for slower
service and say the company is struggling to compete with
resurgent rivals such as Wendy's Co and Burger King
Worldwide Inc as well as privately held chains such as
In-N-Out Burger and Chick-fil-A.

Restaurant sales in the Asia/Pacific, Middle East and Africa
region that includes China and Japan fell a
steeper-than-expected 14.5 percent. Diners shunned the chain
after a television news expose showed workers mishandling meat
at a key supplier in China, and McDonald's scrambled to find new
sources for ingredients to make its Chicken McNuggets and Big
Macs.

Sales at U.S. restaurants open at least 13 months were off
2.8 percent, also more than expected. Monthly same-restaurant
sales for the company's home market have been down or flat since
November 2013.

European restaurant sales were down 0.7 percent, less than
feared, as the company grapples with restaurant closures in
Russia, which had been one of its stronger markets in the
region. Russia's food safety watchdog said it ordered the
closures for sanitary reasons but they coincided with a standoff
over the West's Ukraine-related sanctions on Russia.

Global same-store sales dropped 3.7 percent in August, more
than the 3.1 percent decline expected by analysts polled by
research firm Consensus Metrix.

Thompson has shuffled management, most recently announcing
the replacement of McDonald's U.S. president for the second time
in two years. Chief Creative Officer Marlena Peleo-Lazar, who
gets credit for McDonald's "I'm lovin' it" tagline, is also out.

Meanwhile, analysts, investors and franchisees are pressing
the company to simplify its menu, which includes everything from
salads and wraps to lattes and smoothies, in a bid to broaden
its audience and boost sales.
(Additional reporting by Siddharth Cavale in Bangalore; Editing
by Sriraj Kalluvila and James Dalgleish)